I’m Neal Frankle, Certified Financial Planner™. Credit problems are a serious business. In fact they changed my entire family life when I was 16. This site is here to help you repair your credit without getting ripped off. Read my story.

What Are the Risks of Do-It-Yourself Credit Repair?

For the right person Do-It-Yourself credit repair is smart. Of course the cost savings is sweet but that’s just the beginning. You also learn a lot and it’s empowering to see the positive results of your own action. On top of all this, when you work on your own credit repair, you completely avoid the risk of being taken to the cleaners. And this can easily happen if you hire the wrong credit repair firm.

But that’s not to say that DIY credit repair is the only way to go. There really are risks and costs to trying to fix your own credit. This doesn’t mean you shouldn’t give it a try. But you should be aware of the downside and dangers before you embark on this journey. Once you understand the complete situation, you might decide to go ahead anyway or approach the problem completely differently.

What are the risks of do-it-yourself credit repair?

That You’ll Be Stepping Into Something You Don’t Fully Understand

Chances are good that if you are motivated to the point of doing something about your credit, you are already in some financial pain and the situation is bad. That’s OK. But please understand that the credit repair process is rather complicated. For example, there are a number of laws that protect consumers – and we’ll discuss that in greater depth. And if you don’t learn how to apply the laws correctly, or if you miss a minor detail or small step, you might pay dearly for it.

Here’s one tiny example. Many vendors encourage customers to file credit repair disputes via email or phone. That certainly is an easy way to go. The problem is that some of your rights might be invalidated if you follow their advice. That’s right, in order to protect your rights as a consumer, you may have to file your dispute by mailing a snail-mail letter. Again, this is just one of many examples. But the point is, when it comes to credit repair, the devil really is in the details. So if you embark upon this endeavor make sure you study the rules carefully.

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That You’ll Under-estimate the Necessity of a Comprehensive Paper Trail

One of the steps that’s nothing short critical when it comes to credit repair is creating a comprehensive paper trail. This means that you have to think like a lawyer. In other words, you must document everything. That includes all phone calls with creditors, retaining copies of all correspondence sent and received, and not agreeing to anything until and unless it’s confirmed in writing. And you must also demand that the credit bureaus and vendors supply written proof of their counter-claims.

Some people simply don’t have the training and skill to maintain that level of documentation. As well, they sometimes lack the instincts to know just how far to go to increase and maintain that paper trail.

In order to succeed in repairing your credit, you have to adopt the mindset of an attorney when it comes to documentation. And you can never let up. It might be fun to act like an attorney for some people. For others, it could be a nightmare.

That You Don’t Have the Negotiating Skills Necessary

In order to get a good result, you need to be a fairly good negotiator friend. And you have to negotiate from strength. Many people feel weak compared to the huge credit bureaus and vendors especially when they have credit blemishes. That perceived weakness undercuts their ability to negotiate and that can be costly.

If you are able to overcome this disadvantage, no problem. But if you are stressed by the idea of having to negotiate with big business people who are well schooled in intimidation techniques, you might want to bring in your own pro to negotiate on your behalf. There is no shame in that.

That You Don’t Understand the Laws Regarding Credit

One of the most effective weapons that you have in the area of credit repair is strong familiarity with credit laws. There is an entire body of laws with this issue, starting with the Federal Trade Commission. Unless you have a solid grasp of these laws, there is a very high likelihood that you will agree to terms with various creditors that will put you at a decided disadvantage. If a creditor has better understanding of credit laws than you do, he will bully you mercilessly.

One solution of course is to take the time to learn about these regulations. But another option is to hire an attorney or a good credit repair service who knows exactly what these laws are, and how far they can push in an attempt to repair your credit. They will also know how far they can’t go, and in the process they’ll be able to avoid problems that you might incur in an attempt to do it yourself.

That You’ll Quit Before the Job is Finished

No matter what you’ve heard on TV or read on the web, credit repair is a long and difficult process in most cases. It probably isn’t something that you’ll wrap up in a week or even a month.This is true if you do it yourself or work with a firm on your behalf. It generally takes many months, and often more than a year. During that time, you will need to maintain a high level of intensity in dealing with creditors, collection agencies and even the attorneys of creditors.

If you have the stamina – go for it. But if you don’t, it’s probably better to bring in some support from the get-go. The last thing you want to do is start off strong but quit before the magic happens.

When it comes to credit repair, you have to think like a long-distance runner, and not a sprinter. You’ll be dealing with multiple creditors, each having its own internal policies, and each presenting its own set of challenges. More important, settling each account will happen on its own timeline. Though some can be handled relatively quickly, others can drag on for many months. You have to approach it as if it’s a war in which the only way to win is by being victorious in a series of many battles.

Unless you’re willing to stay that course, it’s not even worth entering the fight.

Credit repair is not brain surgery. You can do it yourself. But the question is, are the potential benefits worth the risks and costs? If you are interested in tackling this problem yourself, there is nothing wrong with it. But there is also no shame in hiring a professional and offloading this arduous task. At least that’s how I feel about it. What is your take?

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